Case 1:19-cv-00438-CMA-MEH Document 56 Filed 02/25/20 USDC Colorado Page 1 of 18
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLORADO
`
`Plaintiff,
`
`
`Civil Action No. 1:19-cv-00438-CMA-MEH
`
`CELLECT, LLC,
`
`
`v.
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`SAMSUNG ELECTRONICS CO. LTD., and
`SAMSUNG ELECTRONICS AMERICA, INC.,
`
`
`
`Defendants.
`
`DEFENDANTS’ MOTION TO STAY PENDING INTER PARTES REVIEW AND EX
`PARTE REEXAMINATION OF THE ASSERTED CLAIMS
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`
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`CERTIFICATE OF CONFERRAL
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`
`
`
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`Counsel for Samsung certifies that the parties conferred by telephone on
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`February 24, 2020, and by e-mail on February 25, 2020, regarding the issued raised
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`herein. Despite substantive discussions, Cellect opposes the relief requested herein.
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`I.
`
`INTRODUCTION
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`Last week, Samsung filed twenty petitions for inter partes review (“IPR”) and five
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`requests for ex parte reexamination (“EPR”) with the United States Patent and Trademark
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`Office (“PTO”) that collectively challenge the validity of all 56 claims across 11 patents
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`asserted by Cellect (“Asserted Claims”) against Samsung in this lawsuit. 1 These
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`1 Attached at Ex. A of the Declaration of Alexander Middleton in Support of Motion
`(“Middleton Decl.”) are cover pages and filing notices from Samsung’s 25 filings. Because
`these total about 2,000 pages, Samsung will provide them to the Court if desired.
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`
`
`1
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`

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`Case 1:19-cv-00438-CMA-MEH Document 56 Filed 02/25/20 USDC Colorado Page 2 of 18
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`expedited administrative proceedings will substantially streamline and simplify this case,
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`reduce its overall burden, and conserve Court and party resources—the very objectives
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`Congress intended IPRs/EPRs to achieve. Indeed, these proceedings may ultimately
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`render every Asserted Claim unpatentable/unenforceable, thereby mooting this action in
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`its entirety. Accordingly, Samsung respectfully requests that the Court stay this case.
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`This case is a large patent infringement action in which Cellect has accused nearly
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`40 different Samsung smartphones and tablets of infringing the 56 Asserted Claims
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`across 11 patents. Thus, this case is ideal for allowing the parties to utilize the IPR/EPR
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`procedures as Congress intended. It is unsurprising then, that the four factors that Courts,
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`including those in this District, analyze in evaluating a stay all weigh heavily in favor of
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`imposing a stay here. A stay, for example, will simplify the case and streamline trial (factor
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`1) and reduce the burden on the Court and the parties (factor 4). As detailed below, the
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`majority of IPRs and EPRs filed are instituted by the PTO and most result in claim
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`cancellation. And once cancelled, any such claim cannot be asserted against Samsung
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`because an invalid claim cannot be infringed. See, e.g., Commil USA, LLC v. Cisco Sys.,
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`Inc., 135 S. Ct. 1920, 1929 (2015). Moreover, simplification and streamlining will be
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`achieved even if fewer than all challenged claims are invalidated—Samsung, for example,
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`will be statutorily estopped from asserting in this litigation that Cellect’s remaining claims
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`are invalid on any ground that Samsung raised or could have raised in the IPRs. See 35
`
`U.S.C. § 325(e)(2).
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`Additionally, this case is still in its early stages (factor 2) and the majority of the
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`work by the Court and the parties remains to be done. No depositions have been taken
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`2
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`Case 1:19-cv-00438-CMA-MEH Document 56 Filed 02/25/20 USDC Colorado Page 3 of 18
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`(or even noticed), claim construction and expert discovery have not started, fact discovery
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`will not close for many months, and a trial date has not been set.
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`Finally, a stay will not unduly prejudice Cellect (factor 3). Cellect is a non-practicing
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`entity that delayed filing this lawsuit for five years, and any potential damage base is
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`already capped because all patents are expired.
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`Considered together, all four factors strongly support a stay. Given that it is a near
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`certainty that the IPRs and EPRs will result in invalidation of some, if not all, Asserted
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`Claims, the early stage of this case, and Cellect’s five-year delay in bringing it, engaging
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`in expensive and time-consuming discovery in parallel with the PTO would be wasteful
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`and inefficient.
`
`II.
`
`BACKGROUND
`
`A.
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`IPRs and EPRs Are Designed to Reduce Unnecessary Litigation
`Costs and Shift Patent Validity Burdens from the Court to the PTO
`
`Congress introduced IPR as an administrative adversarial proceeding to challenge
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`patent validity in order to limit excessive and unnecessary litigation costs. See 35 U.S.C.
`
`§§ 311-319; Cocona, Inc. v. VF Outdoor, LLC, No. 1:16-cv-02703-CMA-MLC, ECF No.
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`71, at 3 (D. Colo. Mar. 19, 2018) (“Cocona,” Middleton Decl. Ex. F).2 The IPR process
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`permits a patent infringement defendant to file, within one year of being served with a
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`complaint, a petition challenging any claim of that patent. See 35 U.S.C. § 315(b). The
`
`
`2 Inter partes review (IPRs) replaced inter partes reexaminations in 2012 under the
`Leahy–Smith America Invents Act (“AIA”). See Cocona, at 3 (citation omitted). Unlike an
`inter partes reexamination conducted before a single examiner (MPEP § 2655), an IPR
`is conducted before a panel of three administrative patent judges, and the parties have
`the right to an oral hearing. 35 U.S.C. § 6; 35 U.S.C. § 316(a) (10).
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`
`
`3
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`Patent Trial and Appeal Board (“PTAB”; the PTO body that handles IPRs, but not EPRs)
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`will review this petition (and any patent owner response) and will institute the IPR if there
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`is a “reasonable likelihood that the petitioner would prevail with respect to at least 1 of the
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`claims challenged in the petition.” 35 U.S.C. § 314(a). If instituted, the PTAB then
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`conducts a full review of the challenged claims and issues a final written decision setting
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`forth its detailed analysis and conclusion within one year. See 35 U.S.C. §§ 316(a)(c),
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`316(a)(11), 318(a); 37 C.F.R. § 42.100(c). Any unpatentable claim is canceled. 35
`
`U.S.C. § 318(b). If the petitioner fails to prove that a claim is unpatentable, that petitioner
`
`is statutorily estopped from later asserting in district court that “the claim is invalid on any
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`ground that the petitioner raised or reasonably could have raised during that inter partes
`
`review.” 35 U.S.C. § 315(e)(2).
`
`“Congress
`
`instituted
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`the reexamination process
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`to shift
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`the burden of
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`reexamination of patent validity from the courts to the PTO” with the intent of “utilizing the
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`PTO’s specialized expertise to reduce costly and timely litigation.” eSoft, Inc. v. Blue Coat
`
`Sys., Inc., 505 F. Supp. 2d 784, 786 (D. Colo. 2007) (quotation and citations omitted).
`
`Like IPRs, EPR requests can be based on invalidating prior art. 35 U.S.C. § 303(a). But,
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`like here, EPRs can also be based on grounds not permitted in IPRs (e.g., obviousness-
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`type double patenting). Within three months of an EPR request being filed, the PTO must
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`determine whether a “substantial new question of patentability” exists. Id. If so, the PTO
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`examines the patent in an ex parte proceeding. 35 U.S.C. § 304. A “PTO decision to
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`cancel a patent renders the patent unenforceable in pending litigation.” eSoft, 505 F.
`
`Supp. 2d at 786 (citing Broad. Innovation, L.L.C. v. Charter Commc’ns, Inc., No. 03–CV–
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`4
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`2223–ABJ–BNB, 2006 WL 1897165, at *2 (D. Colo. July 11, 2006)).
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`IPRs and EPRs have been highly effective at eliminating invalid claims while any
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`parallel federal litigation is stayed. The PTAB has instituted 67 percent of requests for
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`post-grant reviews (including IPRs) for electrical patents (like the Asserted Patents) and
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`invalidated claims in 81 percent of those proceedings. See Middleton Decl. Ex. B (Trial
`
`Statistics–December 31, 2019, U.S. Patent & Trademark Office), at *7, 11. Similarly, the
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`PTO has instituted 91 percent of EPRs and canceled or amended claims in 79 percent
`
`of those proceedings. Id., Ex. C (Ex Parte Reexamination Filing Data – September 30,
`
`2018, U.S. Patent & Trademark Office), at 2-3.
`
`The IPR/EPR legislative history reflects congressional approval of courts liberally
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`granting stays pending the completion of these proceedings. See Cocona, at 4 (citation
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`omitted). The IPR process, for example, is designed to further the AIA’s goal of
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`“establish[ing] a more efficient and streamlined patent system that will improve patent
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`quality and limit unnecessary and counterproductive litigation costs.” Id., at 3 (citation
`
`omitted). Staying related litigation pending IPRs “effectuates the intent of the AIA by
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`allowing the agency with expertise to have the first crack at cancelling any claims that
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`should not have issued in the patents-in-suit before costly litigation continues.” Software
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`Rights Archive, LLC v. Facebook, Inc., Nos. C-12-3970 RMW, C-12-3971 RMW, C-12-
`
`3973 RMW, 2013 WL 5225522, at *6 (N.D. Cal. Sept. 17, 2013).
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`Similarly, recognizing that EPRs “‘provide an inexpensive, expedient means of
`
`determining patent validity,” courts have held that EPR determinations “‘if available and
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`practical, should be deferred to by the courts.’” eSoft, 505 F. Supp. 2d at 787 (quoting
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`5
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`Case 1:19-cv-00438-CMA-MEH Document 56 Filed 02/25/20 USDC Colorado Page 6 of 18
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`Digital Magnetic Sys., Inc. v. Ansley, 213 U.S.P.Q. 290, 290 (W.D. Okla. 1982). “[S]hifting
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`the patent validity issue to the Patent Office has many advantages, including: (1) all prior
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`art presented to the court will have been first considered by the Patent Office, with its
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`particular expertise; (2) the outcome of the reexamination many [sic, may] encourage a
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`settlement; (3) issues, defenses, and evidence will be more easily limited in final pretrial
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`conferences after a reexamination; and (4) costs will likely be reduced both for the parties
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`and the court.” EdiSync Sys., Inc. v. Centra Software LLC, No. 03–cv–1587–WYD–MEH,
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`2013 WL 1461484, *1 (D. Colo. April 10, 2013). Recognizing these benefits, courts in
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`this District3 and elsewhere4 routinely grant stays pending such proceedings.
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`B.
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`Procedural History
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`Cellect filed its Complaint on February 14, 2019 and served its initial infringement
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`contentions on November 21, 2019, purportedly asserting 59 claims. It filed amended
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`contentions on December 11, and then finally confirmed that it was asserting 56 (not 59)
`
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`3 See, e.g., Cocona, at 4 (granting stay “because if the IPR petitions result in narrowed
`claims or invalid patents much of a lawsuit will disappear”) (citation omitted); see also
`Kamstrup A/S v. Axioma Metering UAB, No. 19-CV-1669-WJM-SKC, 2019 WL 6296699,
`at *2-3 (D. Colo. Nov. 25, 2019) (granting stay pending IPR); Fusion Specialties, Inc. v.
`China Network Leader, Inc., No. 12-cv-00009-CMA-KMT, 2012 WL 3289077, at *5 (D.
`Colo. Aug. 11, 2012) (J. Arguello) (granting stay pending EPR); Tru-Balance, LLC v.
`Alcoa, Inc., No. 11-cv-01127-CMA-BNB, 2012 WL 619114, at *2 (D. Colo. Feb. 27, 2012),
`recommendation aff’d and adopted, ECF No. 49 (Mar. 16, 2012) (J. Arguello) (granting
`stay pending inter partes reexamination); EdiSync Sys., 2013 WL 1461484, at *1
`(granting stay pending EPR); Karcher North Am., Inc. v. Nilfisk-Advance, Inc., No. 13-cv-
`01284-CMA-MJW, ECF. No. 104 (Apr. 4, 2014) (J. Arguello) (granting stay pending EPR)
`(Middleton Decl. Ex. H); Broad. Innovation, 2006 WL 1897165, at *8 (granting stay pre-
`EPR institution); eSoft, 505 F. Supp. 2d at 789 (granting stay pending institution of inter
`partes reexamination).
`4 See, e.g., Middleton Decl. Ex. I (N.D. Cal. has 76% grant rate for stays pending post-
`grant review proceedings); Middleton Decl. Ex. J (D. Del. has 62% grant rate for stays).
`
`
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`6
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`

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`claims on December 19. See Middleton Decl. Ex. D, at *2 (Dec. 11, 2019 email from M.
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`Colucci) and Ex. E, at *1 (Dec. 19, 2019 email from M. Colucci to A. Middleton). Once
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`Cellect confirmed which 56 claims it was asserting, Samsung immediately began
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`completing its 20 IPR petitions and 5 EPR requests—collectively challenging the validity
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`of all 56 Asserted Claims. Samsung’s 25 petitions and requests were filed between
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`February 15 and 19, 2020. See id., ¶ 3 Ex. A. Samsung’s IPRs challenge the validity of
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`all 56 Asserted Claims, while the EPRs challenge the validity of all Asserted Claims of
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`five of the Asserted Patents based on grounds not available in IPR. See id., ¶¶ 3-4, Ex.
`
`A. In sum, the IPRs and EPRs challenge the validity of every Asserted Claim and the
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`likelihood that this case exists in its current form at the end of this process is near zero.
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`Faced with that, a stay is appropriate, especially because even though this case
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`has been pending for just over a year, the parties engaged in early motion practice and
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`only recently exchanged infringement and invalidity contentions. Fact discovery is at its
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`very beginning, no depositions have been taken, and claim construction and expert
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`discovery have not started. Fact discovery will not close until 60 days after the Court’s
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`claim construction order and no trial date has been set. In other words, the real bulk of
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`work left for the Court and the parties still exists and it makes little sense to do that work
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`in parallel with the PTO when the issues in the case will undoubtedly change significantly.
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`III.
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`ARGUMENT
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`A.
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`Legal Standard
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`Courts in this district have discretion to stay a case pending PTO proceedings and
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`have adopted “a liberal policy in favor of granting motions to stay” based on such
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`
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`7
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`proceedings. Fusion Specialties, Inc., 2012 WL 3289077, at *1 (J. Arguello). In
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`evaluating whether to stay a case pending IPRs/EPRs, courts consider four factors:
`
`(1) whether a stay will simplify the issues in question and
`streamline the trial; (2) whether discovery is complete and
`whether a trial date has been set; (3) whether a stay would
`unduly prejudice the nonmoving party or present a clear
`tactical advantage for the moving party; and (4) whether a
`stay will reduce the burden of litigation on the parties and on
`the court.
`
`eSoft, 505 F. Supp. 2d at 787 (citing Broad. Innovation, 2006 WL 1897165, at *4);
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`Kamstrup, 2019 WL 6296699, at *1-2. Courts often consider the first and fourth factors
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`together. See eSoft, 505 F. Supp. 2d at 787; Kamstrup, 2019 WL 6296699, at *2. The
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`determination of whether a stay is appropriate based on the totality of the circumstances.
`
`See Broad. Innovation, 2006 WL 1897165, at *4.
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`B.
`
`A Stay Will Simplify the Issues, Streamline any Trial, and Reduce the
`Overall Burden of Litigation (Factors 1 and 4)
`
`1.
`
`There is a strong likelihood that the PTO proceedings will
`greatly reduce—if not eliminate entirely—the number of
`Asserted Claims
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`Samsung’s 20 IPRs and 5 EPRs challenge all 56 Asserted Claims on multiple
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`grounds. Middleton Decl., ¶¶ 3-4. Given the large number of Asserted Claims, the
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`number of petitions/requests filed by Samsung, and PTO statistics, it is a near certainty
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`that the PTAB will institute one or more of the petitions/requests, and ultimately invalidate
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`one or more Asserted Claims. In fact, it is likely that many—if not all—of the Asserted
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`Claims will be invalidated. As discussed above, the PTAB’s latest statistics show that,
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`for electrical patents (like the Asserted Patents), the majority of petitions for post-grant
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`reviews (including IPRs) are instituted, and claims are cancelled in most instituted
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`
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`8
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`Case 1:19-cv-00438-CMA-MEH Document 56 Filed 02/25/20 USDC Colorado Page 9 of 18
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`proceedings. See id. Ex. B at *7, 11. Similarly, the EPRs are also likely to be instituted,
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`leading to additional invalidation of Asserted Claims. See id. Ex. C, at 2-3.5 “Thus, there
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`is a high statistical likelihood that reexamination of the [Asserted Patents] will leave
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`[Cellect] without a valid infringement claim. . . .” Fusion Specialties, 2012 WL 3289077,
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`at *2; Broad. Innovation, 2006 WL 1897165, at *8 n.8 (“[T]he PTO grants more than nine
`
`of every ten petitions for reexamination,” and “there is a [high] likelihood that the PTO will
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`eliminate, amend or otherwise limit the claims at issue, which will significantly alter the
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`nature and amount of work for the attorneys, the court and the jury.”).
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`2.
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`This case will be streamlined and the burden of litigation will
`be reduced through the PTO’s cancellation of claims
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`Courts in this district have recognized that “the specialized expertise the PTO can
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`bring to bear on the question whether prior art undermines the validity of the patent’s
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`claims would unquestionably help this court resolve Plaintiff’s case expeditiously,
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`efficiently, and—most importantly—correctly.” Cocona, at 6 (citing eSoft, 505 F. Supp.
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`2d at 787). Given the large number of claims asserted by Cellect, this case will greatly
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`benefit from the PTO’s specialized expertise.
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`There is a high likelihood that at least some claims will be canceled by the PTO,
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`which will necessarily streamline this litigation and simplify the issues by “eliminat[ing]
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`trial of [an] issue . . . .” Gould v. Control Laser Corp., 705 F.2d 1340, 1342 (Fed. Cir.
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`1983). This is because “when a claim is cancelled, the patentee loses any cause of action
`
`based on that claim, and any pending litigation in which the claims are asserted becomes
`
`
`5 According to its most recent published statistics, the PTO has cancelled all patent claims
`in 12% of EPRs. See Middleton Decl. Ex. C, at 3.
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`
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`9
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`moot.” Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1340 (Fed. Cir. 2013),
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`cert. denied, 134 S. Ct. 2295 (May 19, 2014); Cocona, at 7 (“[T]his should reduce the
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`burden on the court because . . . [I]f [defendant] wins on those issues, the patent claim
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`will drop out of this case.”). Because every Asserted Claim has been challenged in
`
`Samsung’s IPR petitions or EPR requests, if the PTO agrees with Samsung, “[t]his would
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`not just reduce the burden of litigation on the parties and the court—it would entirely
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`eliminate it.” VirtualAgility Inc. v. Salesforce.com, Inc., 759 F.3d 1307, 1314 (Fed. Cir.
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`2014).
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`Ultimately, a stay pending the PTO proceedings will avoid time-consuming,
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`expensive, and burdensome discovery that may be unnecessary in view of the outcome
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`of the PTO proceedings, and will reduce the burden both on the Court and the parties.
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`3.
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`Even if not all claims are ultimately cancelled, the PTO
`proceedings will simplify issues before the Court, including
`invalidity, claim construction, and the determination of correct
`priority dates
`
`Even if some claims survive the IPRs and EPRs, or if some are not instituted, a
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`stay would still simplify the issues and reduce the burden on the Court and parties.
`
`First, once the PTAB issues an IPR decision, Samsung is estopped under
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`35 U.S.C. § 315(e)(2) from raising in this case any argument that was raised, or
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`reasonably could have been raised, in the IPR. See Kamstrup, 2019 WL 6296699, at *2
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`(failed invalidity arguments would be “off the table (along with all potentially associated
`
`proceedings, such as claim construction),” and defendant’s “incentives to litigate versus
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`settle would be greatly affected”); Vivint, Inc. v. Alarm.com Inc., No. 2:15-CV-392 CW,
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`2016 WL 4750176, at *3 (D. Utah Sept. 12, 2016) (stay pending IPR is justified because,
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`10
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`“even if a few claims are invalidated or cancelled, then the court and the parties will not
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`have to address the validity of infringement as to those claims”). Thus, as a result of the
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`IPR estoppel, staying this litigation pending a final written decision by the PTO will reduce
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`and simplify the issues in the litigation for those claims that survive. See Cocona, at 7.
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`Second, granting a stay would still facilitate a more efficient trial in this case by
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`potentially eliminating claim construction (and other) issues for the invalidated claims and
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`by developing the claim construction record available to the Court for those that remain.
`
`See Gould, 705 F.2d at 1342. “One purpose of the reexamination procedure is . . . to
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`facilitate trial . . . by providing the district court with the expert view of the PTO (when a
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`claim survives the reexamination proceeding).” Indeed, the Court may “derive benefit
`
`from the PTAB’s claim construction for the patents under review. . . . [I]ts analysis would
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`likely prove helpful to this Court, no matter its final determination.” Black Hills Media, LLC
`
`v. Pioneer Elecs. (USA) Inc., No. 14-cv-00471 SJO (PJWx), 2014 WL 4638170, at *6
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`(C.D. Cal. May 8, 2014) (internal citation omitted). Thus, “if the PTO upholds the validity
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`of [any] Patent upon reexamination [and IPR], the parties and the Court will benefit from
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`the PTO’s expert analysis . . . .” Fusion Specialties, 2012 WL 3289077, at *2 (citing eSoft,
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`505 F. Supp. 2d at 787). On the other hand, if this case proceeds in parallel with the IPRs
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`and EPRs, the Court and the parties will proceed through claim construction (for which
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`briefing is set to complete in June) on an incomplete PTO record. See ECF. No. 27 at
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`11; Convergence Techs. (USA) LLC v. Microloops Corp., No. 5:10-cv-02051 EJD, 2012
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`WL 1232187, at *3 (N.D. Cal. Apr. 12, 2012) (“Even a confirmation by the PTO of all
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`claims is assistive here . . . since staying the case pending reexamination will allow the
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`11
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`parties to complete the prosecution history, which will inform the parties’ and the Court’s
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`constructions of the asserted claims.”) (citation and internal quotation marks omitted).6
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`Third, granting a stay will allow the PTO, with its particularized expertise in patent
`
`matters, to resolve the parties’ critical dispute in the litigation regarding the priority dates
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`of the Asserted Claims. See Middleton Decl. Ex. G (Jan. 21, 2020 Samsung Invalidity
`
`Contentions), at 10. Because Samsung’s IPRs place the priority date squarely at issue
`
`for most Asserted Claims, the PTO will need to resolve this dispute—and this Court will
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`benefit from that resolution. See, e.g., Purdue Pharma L.P. v. Iancu, 767 F. App’x 918,
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`924-25 (Fed. Cir. 2019) (affirming the PTO’s finding in an IPR that a provisional
`
`application did not provide sufficient written description to support a priority claim).
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`C.
`
`The Litigation is in its Early Stages (Factor 2)
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`The second factor—whether discovery is complete and a trial date has been set—
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`also heavily weighs in favor of a stay. This case is still in its early stages: the parties
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`have exchanged limited interrogatories and requests for production and exchanged
`
`contentions, but no depositions have been taken, claim construction and expert discovery
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`has not started, and no trial date has been set. Fact discovery is not scheduled to close
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`until 60 days after the Court’s claim construction order. ECF. No. 27, at 11. This is many
`
`months, if not a year, away. Under these circumstances, the second factor weighs in
`
`
`6 In one recent action in this District, the parties waited until after the PTAB instituted the
`IPR before jointly requesting a stay. See Middleton Decl. Ex. K, Realtime Adaptive
`Streaming LLC v. Sling TV L.L.C., No. 1:17-cv-02097-RBJ (ECF Nos. 157, 159, 161), Ex.
`L (docket report), at 30-31. In granting the stay, the Court advised that “[i]n the future,
`you might wish to consider seeking stays before putting courts to the work involved in a
`Markman hearing and order.” Id. Ex. L, at 31 (ECF No. 162, Text Order, Feb. 26, 2019).
`
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`12
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`Case 1:19-cv-00438-CMA-MEH Document 56 Filed 02/25/20 USDC Colorado Page 13 of 18
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`favor of a stay. See, e.g., Cocona, at 10-13 (granting stay pending IPR after infringement
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`and invalidity contentions exchanged, but no depositions taken); Tru–Balance, 2012 WL
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`619114, at *1 (finding that the second factor weighs in favor a stay where “[d]iscovery is
`
`not completed and no trial date has been set.”); Dentsply Sirona, Inc. v. Edge Endo, LLC,
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`No. 1:17-CV-01041 WJ/SCY, 2018 WL 4773369, at *2 (D.N.M. Oct. 3, 2018) (finding in
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`favor of a stay where “substantial and costly work remains in this case,” including a
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`Markman hearing, all deposition, expert discovery, and dispositive motions).
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`D.
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`A Stay Will Not Unduly Prejudice Cellect, a Non-Practicing Entity
`That Delayed Asserting its Expired Patents (Factor 3)
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`The third factor weighs also heavily in favor of a stay. This factor requires
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`considering whether a stay would unduly prejudice Cellect and give Samsung a tactical
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`advantage. Here, a stay would not prejudice Cellect at all and Samsung would not gain
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`a tactical advantage. Indeed, because the possibility of a delay is present in every case
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`where a stay is sought, “[t]he delay inherent to the reexamination [and IPR] process does
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`not constitute, by itself, undue prejudice.” Corel Software, LLC v. Microsoft Corp., No.
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`2:15-CV-528-JNP-PMW, 2016 WL 4444747, at *2 (D. Utah Aug. 23, 2016) (mere delay
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`itself is not prejudicial) (citation omitted); see also Evolutionary Intelligence LLC v. Yelp
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`Inc., No. C–13–03587 DMR, 2013 WL 6672451, at *8 (N.D. Cal. Dec. 18, 2013) (finding
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`that any delay due to the passage of time “are consequences that apply to any case
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`where reexamination is sought and cannot alone demonstrate undue prejudice”).
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`1.
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`Cellect’s five year delay in bringing this lawsuit belies any
`assertion of prejudice
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`Cellect cannot credibly claim prejudice after waiting five years to bring this suit.
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`13
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`Case 1:19-cv-00438-CMA-MEH Document 56 Filed 02/25/20 USDC Colorado Page 14 of 18
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`Cellect alleges it gave Samsung notice of the patents in February 2014, but it chose to
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`wait until February 2019 to bring suit. See Complaint, ¶¶ 46-47, 50-51 (alleging “in-
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`person notice” to Samsung on or about February 2014).7 Cellect’s “apparent delay in
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`bringing this lawsuit casts doubt on [any] claim that it will suffer irreparable harm if a stay
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`issues.” Fusion Specialties, 2012 WL 3289077, at *4 (finding no prejudice in part because
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`plaintiff knew of defendant’s allegedly infringing activity for over a year before
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`commencing the lawsuit); Zillow, Inc. v. Trulia, Inc., No. C12-1549JLR, 2013 WL
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`5530573, at *7 (W.D. Wash. Oct. 7, 2013) (finding plaintiff’s allegation of undue prejudice
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`to be undermined in part by its delay in filing the lawsuit for more than a year after
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`defendant launched the allegedly infringing service). Indeed, Cellect’s “lack of urgency”
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`in filing this suit undermines any assertion that “the litigation [should] move forward with
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`all dispatch now.” See Corel, 2016 WL 4444747, at *2 (citation omitted).
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`2.
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`Cellect cannot assert it would be prejudiced by a stay because
`it is a non-practicing entity asserting expired patents
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`As a non-practicing entity, Cellect does not make or sell products and it does not
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`compete with Samsung in the marketplace. See Compl., ¶¶ 1, 9-12. Thus, Cellect can
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`be compensated adequately for any infringement with monetary damages alone and it
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`will not suffer “irreparable harm,” such as lost sales or a loss of market share, due to a
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`stay. See Complaint, Prayer for Relief (no request for injunctive relief); Broad. Innovation,
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`2006 WL 1897165, at *11 (finding factor “weighs in favor [of] staying the case because
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`monetary relief—the only relief Plaintiffs seek—is fully capable of restoring Plaintiffs to
`
`
`7 Samsung disputes that Cellect provided notice to Samsung in February 2014.
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`
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`14
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`Case 1:19-cv-00438-CMA-MEH Document 56 Filed 02/25/20 USDC Colorado Page 15 of 18
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`the status quo ante”); Black Hills Media, 2014 WL 4638170, at *7 (“Plaintiff is a patent
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`licensing company and does not compete directly with Defendants, so monetary damages
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`will sufficiently compensate Plaintiff for any delay caused by a stay.”). Moreover, all
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`Asserted Patents are expired, so the potential damages base related to that purely
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`monetary relief is already capped.
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`3.
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`Samsung did not delay in seeking IPR/EPR Relief
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`Samsung started working on its 25 IPR petitions and EPR requests months ago
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`and filed them only nine weeks after receiving Cellect’s December 19, 2019 final list of
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`Asserted Claims. See Middleton Decl. Ex. E, at *1 (Dec. 19, 2019 email from M. Colucci
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`to A. Middleton). Once Samsung received this list (which increased the number of
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`Asserted Claims from 11 in the Complaint to 56 in its contentions), Samsung worked
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`diligently to focus its efforts on challenging all 56 of those claims. All 25 IPRs/EPRs were
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`filed two months later—between February 15 and 19, 2020. Middleton Decl. ¶¶ 3-4. Ex.
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`A. There was no delay here that would support a claim of undue prejudice. See, e.g.,
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`Cocona, at 14-16 (no undue prejudice where a single IPR petition was filed seven months
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`after service of invalidity contentions); Software Rights Archive, at *6 (granting stay where
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`the “[d]efendants served preliminary invalidity contentions on April 29, 2013, and then
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`spent three additional months to prepare and file the IPR petitions,” which the Court found
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`was “a reasonable amount of time given the complexity of the claims, prosecution history
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`and prior art at issue.”).
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`IV.
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`CONCLUSION
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`Samsung respectfully requests that this Court grant Samsung’s Motion to Stay.
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`
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`15
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`Case 1:19-cv-00438-CMA-MEH Document 56 Filed 02/25/20 USDC Colorado Page 16 of 18
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`
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`February 25, 2020
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`Counsel for Samsung
`
`/s/ Evan M. Rothstein
`Evan M. Rothstein
`ARNOLD & POTTER KAYE SCHOLER
`370 Seventeenth Street, Suite 4400
`Denver, CO 80202-1370
`Telephone: (303) 863-2308
`Facsimile: (312).583-2360
`Evan.Rothstein@arnoldporter.com
`
`James R. Batchelder
`David S. Chun
`ROPES & GRAY LLP
`1900 University Ave, 6th Floor
`East Palo Alto, CA 94303-2284
`Telephone: (650) 617-4000
`Facsimile: (650) 617-4090
`James.Batchelder@ropesgray.com
`David.Chun@ropesgray.com
`
`Steve Pepe
`Kevin J. Post
`Alexander Middleton
`ROPES & GRAY LLP
`1211 Avenue of the Americas
`New York, NY 10036-8704
`Telephone: (212) 596-9000
`Facsimile: (212) 596-9090
`Steven.Pepe@ropesgray.com
`Kevin.Post@ropesgray.com
`Alexander.Middleton@ropesgray.com
`
`Scott. S. Taylor
`ROPES & GRAY LLP
`Prudential Tower
`800 Boylston Street
`Boston, MA 02199-3600
`Telephone: (617) 951-7000
`Facsimile: (617) 951-7050
`Scott.Taylor@ropesgray.com
`
`
`
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`16
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`Case 1:19-cv-00438-CMA-MEH Document 56 Filed 02/25/20 USDC Colorado Page 17 of 18
`Case 1:19—cv-00438—CMA—MEH Document 56 Filed 02/25/20 USDC Colorado Page 17 of 18
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`
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`COUNSEL FOR DEFENDANTS
`COUNSEL FOR DEFENDANTS
`SAMSUNG ELECTRONICS CO. LTD.
`SAMSUNG ELECTRONICS CO. LTD.
`AND SAMSUNG ELECTRONICS
`AND SAMSUNG ELECTRONICS
`AMERICA, INC.
`AMERICA, INC.
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`17
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`Case 1:19-cv-00438-CMA-MEH Document 56 Filed 02/25/20 USDC Colorado Page 18 of 18
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`CERTIFICATE OF SERVICE
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`I hereby certify that on February 25, 2020, electronically filed the foregoing
`DEFENDANTS’ MOTION TO STAY PENDING INTER PARTES REVIEWS AND EX
`PARTE REEXAMINATIONS OF ASSERTED CLAIMS with the Clerk of Court using the
`CM/ECF system, which will send notification of such filing to the following e-mail
`addresses:
`
`Jonathan S. Caplan – jcaplan@kramerlevin.com
`Marcus A. Colucci – mcolucci@kramerlevin.com
`Paul J. Andre – pandre@kramerlevin.com
`Kenneth F. Eichner– Ken@EichnerLaw.com
`Lynn C. Hartfield – lynn@eichnerlaw.com
`Attorneys for Plaintiff
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`
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`
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`By: /s/ Evan M. Rothstein
`
`Evan M. Rothstein
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`